(File Photo: An aerial view of Syncrude)
Suncor Energy is making an unsolicited bid to buy outstanding shares of Canadian Oil Sands Ltd., the major shareholder and operator of Syncrude.
The deal would see Suncor buy out the shares for a total of about $4.3 billion, including chewing up $2.3 billion of COS’ estimated outstanding net debt as of Jun. 30, 2015.
COS shareholders will get consideration for one-quarter of a Suncor share for each COS share held.
“We believe this is a financially compelling opportunity for COS shareholders,” said Steve Williams, Suncor’s president and chief executive officer. “By accepting this Offer, COS shareholders will become investors in Canada’s leading integrated energy company with 50 years of experience in oil sands operations and a track record of returning significant value to shareholders. We’re offering a significant premium to COS’ current market price and also providing exposure to a meaningful dividend increase. We’re confident in the value this Offer provides to COS shareholders.”
The offer is 43 per cent above market value for COS based on closing prices on the TSX on Friday, Oct. 2, 2015, and a 35 per cent premium compared to the stock’s 30 day weighted average over 30 days ending Oct. 2, 2015.
Suncor’s offer is open until 5 p.m. Mountain Time on Dec. 4, 2015, Suncor can withdraw the offer or extend the deadline at any time.
Canadian Oil Sands Ltd., owns a 37 per cent stake in Syncrude, while Suncor controls 12 per cent of the project.
A succesful buyout would make Suncor the major shareholder with a 49 per cent stake in the oil sands project.
MyMcMurray has requested additional comment from Canadian Oil Sands Ltd., and Suncor. Syncrude has deffered all comments to COS.
